In a leaderless world, capitalists are seizing control

The logo of Russia's top crude producer Rosneft is seen at the company's headquarters, behind the Kremlin wall, in central Moscow.

G-Zero is the “new world order in which no single country or durable alliance of countries can meet the challenges of global leadership. What happens when the G20 doesn’t work and the G7 is history?” asks geopolitical economist Ian Bremmer in his bestseller, “Every Nation for Itself: What Happens When No One Leads the World?”

The answer is simple: Capitalists take leadership control, replacing presidents, prime ministers, kings. This new reality was highlighted in a recent photo-op of the $40 million a year Exxon Mobil president shaking hands with the CEO of Rosneft, Russia’s oil producing giant. The deal: a $700 million oil exploration pact in the Arctic.

What irony: The U.S. president makes just $400,000 a year. He’s under pressure from environmentalists about Big Oil. We’re in a new Cold War with Russia, issuing weak sanctions. And here’s one of America’s biggest capitalists thumbing his nose at politics, smiling, shaking hands, getting a deal to drill oil with an archenemy in the threatened Arctic Ocean against the warnings of environmentalists worldwide.

First Stage: More global leaders adopting principles of new capitalism

Yes, economics trumps politics: Bremmer warns, in our 21st century world, no single nation is willing and capable of leading the rest. Result: Anarchy — economic, political and moral anarchy — with 197 nations all selfishly acting solely out of self-interest. And worse, no one to become the economic, political and moral compass for the rest of the world.

“If the worst threatened — a rogue nuclear state, a major health crisis, the collapse of the:system — where would the world look for leadership?” asks Bremmer. No effective political leaders around: “For the first time in seven decades, there is no single power or alliance of powers ready to take on the challenges of global leadership. A generation ago, the United States, Europe, and Japan were the world’s powerhouses, the free-market democracies that propelled the global economy forward. But today, they struggle just to find their footing.”

Worse, Bremmer warns, “This leadership vacuum is here to stay, as power is regionalized instead of globalized. Now that so many challenges transcend borders, from the stability of the global economy and climate change to cyber attacks and terrorism, the need for international cooperation has never been greater,” but missing in action.

Second Stage: China-style capitalism is interim step to total capitalist rule

Bremmer answered this pivotal question in earlier book, “The End of the Free Market: Who Wins the War Between States and Corporations? “There is a second critical element defining our new “G-Zero World Order.”

Bremmer sees sovereign states like China in an earlier stage of transition, combining a little capitalism with their traditional government style: “A number of authoritarian governments, drawn to the economic power of capitalism but wary of uncontrolled free markets, have invented something new: state capitalism. In this system, governments use markets to create wealth that can be directed as political officials see fit.”

So who wins? Imagine “G-Zero” as a chess match: anarchy is the queen in a virtual no-man’s-land of regional battlefields with 197 nations fighting in multiple skirmishes, each serving their own special interests, with no international overseers. Moreover, in this game, anarchy has a powerful partner; capitalism is the King, and more and more are filling the vacuum left by ineffective government leaders.

Bremmer has been observing the “rise of state capitalism and its long-term threat to the global economy. The main characters in this story are the men who rule China, Russia, and the Arab monarchies of the Persian Gulf, but their successes are attracting imitators across much of the developing world.

Third Stage: New capitalists rapidly replacing politicians in leadership

Open your eyes: Capitalism is the one and only next big trend, and has been for a generation. No, not the pure competitive 1776 capitalism Adam Smith envisioned in his defining “The Theory of Moral Sentiments” and “The Wealth of Nations.”

Today we have a new ultraconservative capitalism dominating, manipulating and controlling titular government leaders with the ideologies of Milton Freidman, Ayn Rand and Ronald Reagan, as they have been distorted, morphing into today’s obstructionist GOP and its do-nothing tea party allies. But always lurking behind in the shadows, superrich capitalists pulling the real strings of power.

Yes, the new capitalism has conquered the world in one short generation, fueled by many traits: anarchy, gridlock, individualism, egocentricity, arrogance and a blind faith in greed. And that spells future troubles for superrich capitalists and the rest of the world.

Here’s how Bremmer and economist Nouriel Roubini explored this rapid acceleration of the last generation that’s redirected capitalism into a new morally deficient anarchy. They previewed the new world order in Foreign Affairs a few years ago, warning us of the “G-Zero World: The New Economic Club Will Produce Conflict, Not Cooperation.”

Living in our new G-Zero world where no one can set “a truly international agenda” will intensify “conflict on the international stage over vitally important issues, such as international macroeconomic coordination, financial regulatory reform, trade policy, and climate change. This new order has far-reaching implications for the global economy, as companies around the world sit on enormous stockpiles of cash, waiting for the current era of political and economic uncertainty to pass. Many of them can expect an extended wait.”

Why? Conflicts, competition, wars and revolutions will keep accelerating in the new G-Zero world order, with no strong leaders among the 197 nations solving the big issues; by default we will fulfill the Pentagon’s 2020 prediction in Fortune: “As the planet’s carrying capacity shrinks, an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge ... warfare is defining human life.”

So forget cooperation. Today globalization has created a massive arena for the new anarchism fueled by capitalist ideologues perpetually at war, fighting to gain the prize by defeating their opponents, riding the thrill of victory, avoiding the agony of defeat.

So what’s new? With the global power of both anarchy and capitalism expanding, our new leaderless G-Zero World Order is vulnerable to new risks.

As Bremmer and Roubini put it: “There is nothing new about this bickering and inaction.” They remind us that world powers took four decades to negotiate the Nuclear Nonproliferation Treaty. “In fact, global defense policy has always been essentially a zero-sum game, as one country or bloc of countries works to maximize its defense capabilities in ways that deliberately or indirectly challenge the military preeminence of its rivals.”

But today government leaders are impotent, rapidly being replaced by superrich, powerful capitalists in the new G-Zero global economy where the rules of the game are rapidly changing: “International commerce is a different game; trade can benefit all players.” Wrong. It can, once was, but no longer, not today: “In the past, the global economy has relied on a hegemon, the United Kingdom in the eighteenth and nineteenth centuries and the United States in the twentieth century, to create the security framework necessary for free markets, free trade, and capital mobility.”

No hegemon in the G-Zero World Economy. We have a vacuum of international leadership just at the moment when it is most needed.” And in the absence of powerful political leaders, capitalists are filling the leadership vacuum ... economic inequality is increasing ... setting the stage for more wars ... widespread rebellions ... and new class revolutions.

The trend is overwhelming: The world mass-produces billionaires. Today there are 1,645 billionaires compared with 322 in 2000. In one generation. Forbes says the U.S. has 492, Europe 468, China 358, Russia 111, Latin America 85, India 65, Canada 29, Africa 29, and more. Today 67 billionaires own half the world, as much as the poorest 3.5 billion. And the richest of the Super Rich will get even richer: Credit Suisse Bank predicts 11 trillionaire families by 2100.

But while billionaires and bankers see perpetual economic growth on the planet as population explodes from 7.3 billion to 10 billion, see billions of new consumers and new economic growth, all reinforcing their belief in the trend and adding more billionaires. Unfortunately, sooner of later the leaders of G-Zero World Capitalism will realize that perpetual economic growth is impossible on a planet of limited resources. The math just doesn’t work out folks.

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